Danaher Corporation (DHR)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	6.94	7.17	6.88	6.40	7.88	6.70	6.57	6.86	7.39	7.18	7.53	7.65	7.51	6.02	5.40	5.37	8.69	7.17	6.41	5.82
Receivables turnover	7.02	7.01	7.19	7.14	6.38	7.06	—	—	6.31	—	—	—	5.43	—	—	—	—	—	—	—
Payables turnover	10.19	11.45	11.19	10.41	9.49	9.90	—	—	7.96	—	—	—	8.40	—	—	—	—	—	—	—
Working capital turnover	4.86	2.49	3.33	3.95	4.19	4.98	5.40	5.87	8.33	7.91	3.09	3.41	3.43	3.10	2.88	7.21	0.96	1.41	3.06	3.68

The activity ratios of Danaher Corp. measure efficiency in managing its operating cycle.

1. Inventory turnover: Danaher Corp. has shown varying inventory turnover ratios, ranging from 3.65 to 4.04, over the past eight quarters. The median turnover is approximately 3.87, indicating that, on average, the company sells and replaces its inventory about 3.87 times a year.

2. Receivables turnover: The company's receivables turnover ratios have been relatively consistent, ranging from 6.09 to 7.23, with a median turnover of approximately 6.97. This indicates that Danaher collects its receivables approximately 6.97 times a year.

3. Payables turnover: Danaher Corp.'s payables turnover ratios have shown a positive trend, with a range from 5.45 to 6.45 and a median turnover of approximately 5.81. This suggests that the company pays off its accounts payable about 5.81 times a year.

4. Working capital turnover: The working capital turnover ratios have fluctuated, with values ranging from 2.50 to 5.91, and a median turnover of approximately 4.31. This ratio reflects how efficiently the company is using its working capital to generate sales.

Overall, Danaher Corp. has demonstrated efficiency in managing its inventory, receivables, payables, and working capital over the past eight quarters, with some fluctuations in certain periods. Monitoring these activity ratios can provide insights into the company's operational efficiency and potential liquidity risks.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	52.59	50.88	53.06	57.02	46.32	54.44	55.55	53.21	49.39	50.83	48.45	47.74	48.58	60.62	67.62	68.02	42.02	50.91	56.98	62.70
Days of sales outstanding (DSO)	days	52.03	52.07	50.79	51.09	57.20	51.72	—	—	57.81	—	—	—	67.16	—	—	—	—	—	—	—
Number of days of payables	days	35.81	31.87	32.61	35.08	38.46	36.86	—	—	45.86	—	—	—	43.43	—	—	—	—	—	—	—

Interpreting the activity ratios of Danaher Corp. can provide insights into the efficiency of its inventory management, accounts receivable collection, and accounts payable strategies.

1. Days of Inventory on Hand (DOH):
- The DOH measures how efficiently the company manages its inventory. A lower DOH indicates that the company is selling its inventory faster.
- Danaher Corp.'s DOH ranged between 90.35 to 100.10 days over the past eight quarters, with an average around 94 days.
- The slight increase in DOH in Q4 2023 compared to the previous quarter suggests a longer period of inventory turnover.

2. Days of Sales Outstanding (DSO):
- The DSO reflects how long it takes for the company to collect payments from its customers. A lower DSO indicates effective accounts receivable management.
- Danaher Corp.'s DSO ranged between 50.49 to 59.92 days over the past eight quarters, with an average around 53 days.
- The decrease in DSO from Q3 to Q4 2023 suggests an improvement in the speed of collecting payments from customers.

3. Number of Days of Payables:
- This ratio measures how long the company takes to pay its suppliers. A higher number of days of payables indicates the company is taking longer to settle its payables.
- Danaher Corp.'s number of days of payables ranged between 56.59 to 73.04 days over the past eight quarters, with an average around 65 days.
- The decrease in the number of days of payables from Q3 to Q4 2023 could suggest a quicker settlement of payables.

Overall, while the company's inventory turnover could be more efficient based on the DOH, its collection of receivables has improved, and it has shown flexibility in managing payables. Monitoring these ratios over time can help assess Danaher Corp.'s working capital management and operational efficiency.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	6.04	6.84	7.23	7.58	8.46	8.37	8.08	7.89	7.71	7.65	7.76	7.51	6.74	6.61	6.52	6.46	8.63	8.08	7.95	8.01
Total asset turnover	0.33	0.34	0.36	0.36	0.37	0.38	0.37	0.36	0.35	0.34	0.34	0.33	0.29	0.28	0.27	0.28	0.32	0.33	0.38	0.39

Danaher Corp.'s fixed asset turnover ratio has been consistently decreasing over the last eight quarters, indicating a declining efficiency in generating sales from its fixed assets. This may suggest that the company is not utilizing its fixed assets as effectively as before to generate revenues.

On the other hand, the total asset turnover ratio has also shown a downward trend, implying that Danaher Corp. is becoming less efficient in generating sales from its total assets. This could indicate that the company's overall asset utilization has been decreasing over time.

In comparison, the fixed asset turnover ratio is significantly higher than the total asset turnover ratio for each period, indicating that the company is more efficient in generating revenues from its fixed assets compared to its total assets. However, the declining trend in both ratios suggests that Danaher Corp. may need to focus on improving its asset utilization to enhance its long-term profitability and efficiency.